National Media Release CoreLogic Hedonic Home Value Index, April 2017 Results Released: May 1, 2017
www.corelogic.com.au/news
CoreLogic April 2017 Home Value Index Results: Capital gains ease and record slowest month-on-month growth conditions since December 2015. According to the CoreLogic results, dwelling values increased by 0.1% across the combined capital cities in April, with housing market conditions slowing in both Sydney and Melbourne. Head of CoreLogic Research Tim Lawless said, “The two hottest housing markets in the nation have shown signs of slowing down in April, with the CoreLogic Hedonic Home Value Index recording a rise of just 0.1% over April, the lowest month-on-month rise in capital city dwelling values since December 2015.” “The moderation in growth was due largely to a slightly negative April result in Australia’s largest capital city housing market, Sydney, where dwelling values were broadly flat (rounded up from 0.04%) over the month. The result for Melbourne was also lower than previous months of 2017, with dwelling values up 0.5% over the month.” Softer results after dramatic capital gains: The softer results across Australia’s two largest capital cities comes after dramatic capital gains were recorded over the second half of 2016 and the first three months of 2017. Between July 2016 and the end of March 2017, Sydney dwelling values surged 11.3%, whilst Melbourne values increased slightly more at 12.6% in the same period. The April results mark the weakest monthly change in dwelling values across the Sydney market since December 2015, when CoreLogic reported a 1.2% fall in Sydney dwelling values; the soft reading comes after dwelling values have risen by 75.1% over the past five years, an annual rate of growth of 15% over this period. Most other capital cities also recorded softer growth conditions in April than for the first three months of 2017. However, Mr Lawless said, “The trends generally remain positive, with quarterly growth of 2.9% across the combined capitals index.” Hobart Strongest Performer: Based on the rolling quarterly change in dwelling values, the strongest housing market is currently in Hobart, where home values have risen 5.1% over the past three months. Hobart’s housing market has staged a solid improvement over the past two years and is now the third best performing capital city on an annual basis, with dwelling values moving almost 14% higher over the past twelve months alone.
Index results as at April 30, 2017 Region Sydney Melbourne Brisbane
Change in dwelling values Qtr YOY Month 0.0% 4.0% 16.0% 0.5% 3.9% 15.3% 0.6% 0.5% 2.1%
Adelaide Perth
0.8% -1.0%
Hobart Darwin Canberra Combined capitals Rest of State*
Total gross returns 19.6% 18.6% 6.4%
Median dwelling price $860,000 $650,000 $481,000
1.8% -2.4%
2.2% -6.0%
6.3% -2.5%
$430,000 $472,200
1.0%
5.1%
13.6%
19.6%
$363,200
0.5% -2.8% 0.1% 1.1%
-0.9% 1.8% 2.9% 1.8%
-2.3% 8.4% 11.2% 4.9%
2.6% 12.9% 14.9%
$467,000 $605,000 $625,800 $386,000
* Rest of state change in values are for houses only to end of March 2017
Highlights over the three months to April 2017 • • • • • •
Best performing capital city: Hobart +5.1% Weakest performing capital city: Perth -2.4% Highest rental yields: Hobart & Darwin houses with gross rental yield of 4.9% and Hobart Units at 5.4% Lowest rental yields: Sydney & Melbourne houses with gross rental yield of 2.7% and Darwin units at 3.7% Most expensive city: Sydney with a median dwelling price of $860,000 Most affordable city: Hobart with a median dwelling price of $363,200
Change in dwelling values over past twelve months
Cumulative change in dwelling values from Jan 2009 to current (Post GFC growth)
Annual change in dwelling values over past 10 years
Change in dwelling values over growth cycle to date
Caution in calling peak in market: Mr Lawless said, “We need to be cautious in calling a peak in the market after only one month of soft results.” “April, in particular, coincides with seasonal factors including Easter, school holidays and ANZAC day long weekend. The softer results should also be viewed against a backdrop of an ever evolving regulatory landscape s which is firmly aimed at slowing investment and interest-only mortgage lending. Testament to this is mortgage rates which have been edging higher, particularly for investors and interest-only loans, as well as rental yields which have been hovering around record lows. The higher cost of debt, as well as stricter lending and servicing criteria, has likely dented investment demand over recent months.” “In a city like Sydney, where more than 50% of new mortgage demand has been from investors, a tighter lending environment for investment purposes has the potential to impact housing demand more than other cities,” he said.